Do Firms Use Capital and Labor Efficiently? Evidence and Implications of Resource Misallocation

Economists have for a decade or so theorized that moving productive inputs like labor and capital into the firms that make the best use of them is a prime engine of economic growth. But measuring how well this allocation is taking place across economies is a daunting empirical task. Nonetheless, a new Stigler Center working paper by Lenzu and Manaresi tries to do precisely that.  

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How Boys Become Entrepreneurs at the Dinner Table

New research from Hans K. Hvide and Paul Oyer has uncovered some interesting facts about men who start businesses: most of them do it in the same or related industries as their fathers work in, although entrepreneurs with higher IQs are less likely to follow their dads. Ones who do pick their fathers’ industries, however, outperform competing entrepreneurs. Here, the authors examine why.  

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